The former Goldman Sachs trader known as 'Fabulous Fab' is liable in a massive mortgage securities fraud case, a New York City jury found today.

The Securities and Exchange Commission had accused Fabrice Tourre of scheming to sell investors subprime mortgage securities that he knew would fail.

Authorities said the maneuver allowed a hedge fund and its billionaire president, John A. Paulson, to make $1 billion by betting against the investment.

Tourre, a known party lover who grew up in France and moved to the U.S. in 2000 to study at Stanford, insisted at the trial that he never misled anyone. His attorneys portrayed him as a scapegoat in the economic downturn which they said was caused by larger economic forces.

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Verdict: Former Goldman Sachs vice president Fabrice Tourre, center, leaves Manhattan federal court with his attorneys on Thursday after he was found liable in a massive mortgages fraud case

Tourre, 34, found liable in six of seven SEC fraud claims. He faces potential fines and a possible ban from the financial industry. The exact punishment will be determined at a future proceeding.

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The SEC had accused Tourre of misleading institutional investors about subprime mortgage securities that he knew were doomed to fail, setting the stage for a valued Goldman hedge fund client, Paulson & Co. Inc., to secretly bet against the investment.

The maneuver ended up making $1 billion for the hedge fund and its wealthy president, John A. Paulson, and millions of dollars in fees for Goldman.

Liable: French-born Tourre, 34, now faces potential fines and a possible ban from the financial industry

The SEC also sought to show that it helped earn Tourre a bonus that boosted his salary to $1.7 million in 2007.

SEC lawyer Matthew
Martens told the jury in the trial, which kicked off two weeks ago in New York, the deal Tourre put
together was 'secretly designed to maximize the potential it would fail'
to the benefit of the hedge fund.

On the witness stand, the SEC lawyers confronted Tourre with a January 2007 email it said deliberately misled another institutional investor about Paulson's short position in the investment called Abacus 2007-AC1.

Asked repeatedly if the information in the email was 'false,' Tourre responded, 'It was not accurate.'

Under fire: Fabrice Tourre (3rd from L), is shown in this courtroom sketch in Manhattan Federal court

He added: 'I wasn't trying to confuse anybody; it just wasn't accurate at the time.'

Satisfied: After the verdict, litigator Matthew Martens said he was 'gratified' by the result

Tourre left the courthouse without speaking to reporters. His attorney also had no immediate comment.

In
closing arguments, Martens called Tourre's testimony 'surreal,
imaginary, unreal, dream-like' and told jurors that the defendant wanted
them 'to live in his imaginary land ... to live in a fantasy world.'

'Only if you close your eyes to the facts, you can find Mr. Tourre not liable for his actions,' the SEC lawyer said.

Tourre's attorney, John Coffey, countered that the government had 'unjustly accused him of wrongdoing.'

Coffey urged jurors to put the investment's failure in perspective, noting that all similarly packaged securities "went off the cliff as well" after 2007.

Pamela Chepiga, a lawyer for Tourre, said the SEC was trying to turn her client into a 'scapegoat'.

'This is not a case about whether you approve or disapprove of Wall Street,' she had said.

The civil case had been called the most significant legal action related to the mortgage securities meltdown, but it lacked the drama and high stakes of white-collar criminal cases.

Much of the testimony was devoted to the intricacies of synthetic collateralized debt obligations, or CDOs - a complex type of investment central to the case.

Some of the testimony focused on a personal email Tourre sent to his girlfriend in France.

Bourgeoisie: Fabrice Tourre reportedly 'loved to party' and claimed to be from a prominent French family

The SEC lawyers said the missive proved the hubris of a man at the center of a massive fraud, while the defense claimed was "an old-fashioned love letter" penned by a young trader who was full of self-doubt and angst over upheaval in the financial world.

Writing in French, Tourre said of the financial markets: 'The whole building is about to collapse anytime now.'

'Only potential survivor, the fabulous Fab ... Standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!'

Pressed by Marten on what he meant, Tourre said, 'I didn't create any monstrosities.'

Goldman settled with the SEC in 2010 by paying a $550 million fine without admitting or denying wrongdoing. Tourre left the firm in 2012.

Workplace: Tourre started working for Goldman Sachs in New York, pictured, in 2001 but is now pursing a PhD

Tourre told the Journal that he had never intended to work on Wall Street but moved up the ranks after landing the job at Goldman in 2001.

In 2009, he was called to meet with the SEC about a deal he'd helped structure and a year later, a colleague told him there was a news story about the SEC filing a complaint against him and Goldman.

'It was a shock,' he said.

Before he testified to a U.S. Senate subcommittee, he learned Goldman had released his emails to the public.

'They took certain steps that immediately didn't make me look good,' he said. 'But did I understand why they took those steps? Of course I did.'

He said he is now looking forward to returning to the University of Chicago, where he is working towards a degree in economics.